The Property Management Show

Welcome back to The Property Management Show.

On today’s episode, we’re talking to an expert on mergers and acquisitions, who has specific experience in property management. We’re talking to Scott Duke, of OpnRoad. He’s talking about the things that make a difference in the sale of a property management company. Your buyer and your profit will depend a lot on your contracts, your efficiency, and your team.

Scott and his wife bought and ran a property management company in Revenstoke, Canada. They grew their company for seven years and then sold it for 10 times the amount of what they bought it for. The company was sold to Western Trust, a private equity company out of Utah. Before that, he worked at a property management company in Ontario. He has experience working with three-person companies and those that have a staff of 25.

His story of buying and selling that Canadian property management company is a bit of a cautionary tale.

When they bought the company, there were 30 properties under management. Out of those 30 properties, only six had proper contracts with the owners. It wasn’t a sellable asset when they took it over. But, what they really wanted to buy were the brand and the website, and otherwise it felt like they were starting from scratch. It was not a massive acquisition.

Scott realized that he thought property management meant taking care of people’s properties, but really, he was managing finances. It’s a cash in – cash out business model, and he had to make sure his owners had the money they needed for their mortgage payments.

One specific event triggered his desire to sell that company.

It was Christmas Day in 2016 or 2017, and he was under a trailer, defrosting pipes so the family living there could have water on Christmas. That’s when he realized he didn’t want to own the company anymore.

When the owner is under a trailer with frozen pipes, you know that the company relies too heavily on that owner.

So, he spent three years making it an acquirable asset. Scott wanted the company to be something that someone would want to buy.

The starting point? Making the business less dependent on Scott.

Scott says it’s all mindset.

At OpnRoad, Scott and his team sell businesses. They work within all industries, but a lot of businesses they sell are property management companies. They all have to get to a certain size before they can be sold. So, he’s talking about owner dependency all the time.

How do you remove yourself from that dependency?

Scott says you will be trapped in your business until the business cracks through the million or two million revenue mark. Until that point, there’s just not enough cash in the business to pay to replace yourself. You are buying your time and you’re buying your freedom.

You want to focus on yourself as a business owner, not a business operator.

A lot of owners get hung up on the idea that no one can do what they do as well as they do it.

Scott tells entrepreneurs to embrace that. It’s true. But, it won’t be that way forever. The person you hire isn’t going to be as good as you on Day One. The training and the investment into that person makes them as good as you.

His slogan is this: Every Day a Step Away.

You’re getting a further step away from operating your business every single day.

How to Avoid Hiring Bad Apples

A lot of business owners worry about investing time and training into someone who may not work out. Having hired across 11 companies with a total of more than 200 staff, Scott understands that bad apples do get into the bunch once in a while. He has a specific model:

All of this stuff is hard, he cautions. But, the drudgery for the rest of your life is worse.

How do you avoid the employees you don’t want to work with? Scott has two ideas:

When you get the A player, your life changes. So does your company.

Scott says the most important thing you can remember if you want to sell your company is that you’re selling contracts.

You’re selling future cash flow streams that come through contractual agreements. If your contracts aren’t in good shape, you don’t have a saleable company.

Contract quality matters. Recently, a sale was delayed by over 4 months because a property management company’s contracts were outdated, expired, or not even signed.

Term and contract length is the value of your business.

You need a good staff. You need a good reputation. But, your buyers will look at your contracts before they make an offer.

Scott also reminds company owners that you cannot sell to someone smaller than you. That won’t maximize your value. When you’re selling to a company that’s bigger, they’re probably more sophisticated and organized. If you don’t have everything in place, those companies won’t want to acquire you.

Buyers are acquiring teams of people as well as contracts.

This is especially important now, when finding good talent is so difficult. Good operators of companies are hard to find. People will buy companies just to get management teams and technicians.

But, here’s the truth: company buyers are only going to care about bringing on the good team members. They probably already have good team. They won’t want your mediocre people.

Efficiency is important, too. When your profit margin is above average, you’ll earn above average on the sale. You’re showing that you’re more efficient and your buyer will know that they get to keep more of the money that the company makes.

That’s attractive.

Technology is a big part of the efficiency bullet, especially when you’re looking at your profit and loss statement. Most property management companies can see that people are their biggest expenditure. Property management is a service business, and humans are delivering that service.

So, while technology can help you be more efficient and profitable, you need to have people in place who can leverage that technology. Otherwise, you’re just spending money on new software and systems and it’s not improving anything.

If your people aren’t being as efficient as they should be, they need to be trained better. Scott put everything on iPads so the team could take photos and notes and keep everything in the same place. Leases were digitized. He has nine people running a business that should require 20 employees. This is possible because they’re more efficient and they know how to use technology.

Once deciding to sell a business, an owner can sometimes just check out, feeling done with it all.

But, it should be the other way around. If you decide to sell and you want to maximize the value of your company, put in the work.

Scott says it depends on the timeline, and also acknowledges that most people don’t want to do the work. Property management companies are in high demand right now. So even if your business isn’t in the best shape, you’ll be able to sell it. Clean up your contracts and get the financials in order, and you can sell.

If you’re planning to sell within a year, just get the basics taken care of.

If you’re planning to sell in three to five years, it’s worth the effort to build that business into something even better. Then, sell it for more. You’ll make more money now, and as your business begins to work better, you’ll have more free time.

You can really move the dial if you have a few years to work on this. A million dollar company can increase their valuation by $200,000. If you’re a five million dollar company, expect to move that dial by $1.5 million or even $2 million. A 10 million dollar company might move the dial by $5 million.

Scott has a guide that breaks down who the likely buyers are for your company. He offers earnings thresholds as an easy way to understand what’s possible.

You unlock different buyer classes as your company grows.

These buyers are not that different under the hood, but the way you earn money will be a bit different. A strategic buyer will hold your company for the long term. They’ll pay cash and some terms for the acquisition. Private equity firms are strategic. They’ll pay a bit more because they know they’re going to ultimately sell your company for more. You’ll get cash from them at the sale, and you may get a bit more later, when the private equity buyer sells the entire fund, which includes your company.

There are claw backs and contingencies when it comes to how many contracts the new company keeps. Scott reversed that, and actually got paid more by bringing in more contracts after the sale. This is not something everyone is willing to do, he cautioned, but since he had more free time, he was able to get out there and hustle up more business for the property management portfolio he had just sold.

Scott’s big pieces of advice as we conclude this interview are:

Check out OpnRoad and their approach to mergers and acquisitions. If you have any questions about Scott and what we’ve discussed, please contact us at Fourandhalf.

The post Preparing Your Property Management Company for a Profitable Sale with Scott Duke of OpnRoad appeared first on Fourandhalf Marketing Agency for Property Managers.

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Amy Harrison is a sales and marketing copywriter from the U.K. and an expert in storytelling. After hearing her speak at a marketing conference and finding the information invaluable, we invited her onto The Property Management Show to talk about the evolution of marketing content and copywriting and how AI can help with persuasive copy, as long as you’re finessing the message with the information that only you have.

Amy thought she wanted to be a screenwriter for film and television, but quickly burned out at a young age and decided to pursue other things for a while. Then, she found her way back to writing and began working for a private investment firm that bought and sold online businesses. She describes it as flipping businesses, and that’s what brought her back into content writing and copywriting.

When she discovered the psychology around sales copywriting, she knew she wanted to help businesses tell stories and build credibility.

Amy says that her training as a screenwriter helped with her sales copywriting because it’s always important to write for the reader. If someone does not want to keep reading, you’ve lost them. You need to make sure they’ll read beyond the headline.

Amy remembers the early days of copywriting, when everything was very SEO-driven and it seemed like her job was to cram every page full of keywords. The idea was to reach people and to provide as much information as possible. It was more of a transactional exchange.

People found there were better ways to have a sales conversation, and the content improved.

Businesses have realized that not all content needs to sound like sales and marketing content.

There’s a lot more awareness of what marketing and copywriting can do. The struggle, though, has not evolved much. Amy says that large companies with million dollar marketing budgets have the same desire as the freelance photographer with no marketing budget: to sell themselves and to stand out.

The process has evolved, but the problem sales copywriters are trying to solve is the same.

How is it done well?

While trying to talk about what makes them different, a lot of companies will end up sounding like every other business. They’ll use generic words, and they’ll try to talk about everything they do all at once.

Amy calls those umbrella terms, and she advises companies to be bold and to expand their comfort zones outside of those same words and phrases that are always used. The fear factor will sometime set in. You want to stand apart from your competition, but do you really want to be different?

Storytelling can be powerful, but it’s harder to write a story than it is to create a list of benefits.

You have to earn the right to get someone’s attention.

How do you do that? Amy asks us to think about it from the first piece of content – whether it’s a headline or the first few seconds of your video or the introduction in your email.

Speak directly to the person you’re trying to reach.

Think of yourself in a crowded room at a party. You’ll hear lots of conversations, and you’re not tuned into any of them. But if you hear your name, that will immediately get your attention. You cannot call your customers by their name in your content, but you can work harder to make the content more relevant. You want them to feel like you’re talking directly to them.

Think about how to write the conversation that your customer is having in their mind right now. What are they thinking about in that moment as they approach your blog or your email?

Here are a couple of examples:

Think about audience when you begin to tell your story. Are they new to renting out homes? Are they very frustrated? What’s already on their mind?

Get their attention and pull them along. This is like calling their name out in a crowd.

A story is only boring when it’s irrelevant, so think about what’s pressing and relevant to the people you’re trying to reach.

You can also use symptoms of the problem. What are some warning lights that your audience can see? You can suggest that there’s a problem they might not be aware of yet, and your copywriting can indicate that the problem is bigger than they think. That will get their attention, too.

Your prospective clients might not know what the problem is, but they’ll recognize the symptoms. A good headline might be: “Is Poor Maintenance Making You Liable?”

When asked about AI, Amy says it’s a fantastic tool that’s interesting.

It can save time and spit out generic content. It cannot reach your audience like a person who understands the audience can.

AI can help people go from zero content to some content. But, when you read something generated by AI, there’s always that feeling that it’s not quite right. What it lacks is personal nuance.

AI will not help you write exceptional copy. And, it’s not thinking about your customer.

Think about how quickly you can recognize tone in a customer’s email. Your response has to have the context that matches that tone. As humans, we can do that in a second. All that nuance and understanding of psychology and how to apply it does not exist with AI.

You know your customer, your brand, your style, and your tone. Your content should sound like that.

AI is a good tool for getting started, but it’s similar to those umbrella terms. You’re not going to get anything original, and you’re not going to stand out if you use it on its own.

There’s a rhythm to human language that’s different from that of AI-generated language. Amy says it sounds to her like a 15-year-old is trying to write something formal and impressive.

Usually try to get AI to simplify things. If I had spent 10 minutes to simplify myself, better email.

Use AI to save time by gathering notes into a summary. But, when you’re building your messaging, don’t sacrifice that personal nuance that only you know. You need to hear the language that is used.

The summary that AI provides is often a good starting point. It’s better than looking at a blank page. If you can go ahead and rewrite what’s been provided, you can publish something that’s original and well-crafted. You need your own brain in order to complete good copy. You can ask AI to give you 10 benefits of property management. Some of it won’t be quite right. Some of it won’t be applicable. But, you can build off of that into something that’s a meaningful message for a potential client.

Amy reminds us that you can have quality content even if your purpose is not to persuade. Sometimes, content is just entertaining. It’s simply informational. The goal of persuasive content is to help someone feel, think, and ultimately do something. There’s an output you want.

Every piece of content we put out has to be quality, and it can also help to persuade. Answering a question is not necessarily persuasive copywriting, but it can give a customer confidence in you, which ultimately leads to them hiring you.

You don’t have to convince someone to do something in every piece of content. But, you do want all of your messaging to reinforce that you can be trusted. This will help them feel more at ease with you.

Always be driven by your customer’s needs. And don’t be too sales-driven. Think of yourself at a party. When someone talks about themselves for a full hour, do you want to talk to them again? Probably not. When someone asks you a few questions about yourself and then drops a recommendation or two, do you want to talk to them again? Probably yes.

You can have the same effect in marketing and content.

Whether you’re writing an email or FAQs, you need to ask what your customer needs to know in this moment in time. What do they need? If they’re about to sign a management contract, they need transparency and confidence.

AI can’t provide that. This comes from the research. From talking to customers. Companies that are brave enough to actively seek feedback will have better growth. Their marketing will sound different and speak to those customers.

This comes from listening.

Amy reads the freeform text from customer surveys and reviews and she lifts actual words from those reviews when she’s writing copy for customers. Those are huge insights. Amy calls it looking under rocks, and she said AI will always miss those golden moments and major message points.

This makes the difference in your marketing.

Property managers are using their messaging to reach multiple audiences, and Amy says that the best way to reach those unique groups of customers is to keep things simple.

When they arrive on the home page of your website, make sure they know which adventure to choose.

Then, create different content for each different need.

The pain points will be different. The goals will be different. Someone renting out their first home will need different stories than someone growing a portfolio.

Think about it like this: If this person was standing in front of you, how would you speak?

You’d be more reassuring with the first-time landlord. You’d be prepared with facts and figures for an investor with a growing portfolio.

Show that your company has range. Then, offer the specifics. Provide stories that are relevant to each customer.

This takes extra work. But, the harder you work to give your customers what they need, the better your results. If you have any questions for Amy or you’d like some additional advice on how to improve your content marketing and sales copywriting, contact us at Fourandhalf.

The post Persuasive Copywriting in the Age of AI appeared first on Fourandhalf Marketing Agency for Property Managers.

PJ Clay, the Director of Client and Partner Services at Rental Beast, joins us on The Property Management Show to discuss the company’s role as the rental MLS, and how they provide back-end technology to MLS associations across the United States and Canada.

We also discussed whether this type of technology can help or hurt property managers.

PJ says it helps.

Rental Beast calls itself the rental MLS. It provides back-end technology to MLS associations in certain markets throughout the U.S. and Canada. The Multiple Listing Service (MLS) is highly customizable, but also built for the For Sale side of the real estate industry. Rental Beast knows that rentals are different. The process of renting is different from the process of buying and selling.

So, they built the technology that can integrate rental listings.

MLS members can add or search for rental listings.

The second piece of this technology is a productivity suite of tools making it easier for property managers and real estate agents to access lead generation, lead qualification, and rental applications. At the core of this technology is a very large database of rental listings. Members of Rental Beast have access to 12 million active listings in the U.S. and Canada at any given time.

Putting all the rental listings into one database is the central part of our technology. Members can get as close as possible to reaching 100 percent of their market.

Rental Beast is currently working with MLS associations in cities like Boston, where they’re based, Chicago, Raleigh, Miami, Colorado Springs, Toronto, and other markets. They’re actively growing, too, because the demand for this platform has increased. With home sales still out of reach and unaffordable for so much of the market, people are renting. Having the technology for real estate professionals to make the rental process easier has driven that growth.

So, where does the data come from? Where do they gather their listings?

The rental market is fragmented. On the general MLS, you have 80 or 90 percent of available homes for sale on that site. Not all rental listings go onto the MLS, however. Some cities will include rentals on the MLS, but even then you’re only getting about 40 percent of the rental market listed.

Rentals come onto the database from a lot of different sources. The Rental Beast database integrates with property management software. So, platforms like Appfolio, Yardi, RentTech, and Buildium can use Rental Beast as a syndication destination. Any listings on those software sites can be shared with Rental Beast.

The other piece is more difficult and labor intensive. These are rental listings that aren’t found on the MLS or on any property management software sites. Staff at Rental Beast must find the listings and then make actual phone calls to owners and property managers to verify them.

PJ says it took 10 years to build the process the right way. They’re calling any listing that doesn’t come from the MLS or property management software. It’s a huge undertaking, but it’s necessary to avoid scams.

There are also a lot of details that are confirmed for those listings; they ask if there’s an agent compensation fee, what the showing instructions are, and how a tenant can access an application. These listings have to be updated every week or two, depending on the location. If they cannot get a verbal confirmation that the listing is active, it gets dropped from the database.

The majority of listings on Rental Beast are not managed by professional managers or real estate professionals.

They’re managed by the property owners themselves.

PJ believes this is hyper-local. He says that in Boston, property management firms aren’t as recognized or understood as they are in other markets. If a real estate investor owns a few properties, they might hire leasing agents to market the home and get the property rented, but then they take care of the day-to-day management. Even the National Association of Residential Property Managers (NARPM) has a limited presence in the northeast. Recently, they established a local chapter in Philadelphia, but that has only been in the last years.

Compare this to Arizona or other markets in the southwest U.S., he says, and things are different. There’s a larger percentage of listings that are professionally managed.

The estimate is that around 40 percent of the listings on Rental Beast are managed by small, mom-and-pop operations. We’re not talking about large, professional property management companies.

It could also be a terminology issue, PJ says. There may be someone who owns 100 doors, but they don’t see themselves as a professional property manager because they own those units.

Proximity can also be part of the difference. In markets like Texas and Atlanta, it can take an hour to get from one end of the city to another. There’s a concept called leasing and locating where real estate agents will get paid for showing a property without being there physically. The metro area is too spread out.

With all these For Rent By Owner (FRBO) properties in the Rental Beast database and tools that make it easier for those owners to rent out a home, is Rental Beast dangerous to property managers who are trying to grow their business? It’s great to have a single source of data that’s potentially more complete, but there are also solutions being offered to an owner who may self-manage instead of hiring a professional.

PJ is quick to point out that Rental Beast is not trying to be a property management software tool. They understand that a lot of real estate agents hesitate before getting into property management because it’s so much work. Their platform, he says, is more about ease in listing a rental. No one could manage a property only using Rental Beast.

Realtors and agents on the For Sale side have been struggling to sell recently, and so they’re getting into rentals a little bit so they can preserve the relationship with their clients who might be ready to buy in a year or two. Plus, they know they can potentially list some rentals, so it’s a natural shift.

According to PJ, Rental Beast is not looking to replace property managers. They want to complement your work and make your business more efficient, especially in terms of listings. You can get access to a lot of listings, and you have an easier time listing the properties you’re renting out. You get extra syndication, and that drives more showings.

Recently, they worked with a property manager who listed 20 properties on the Rental Beast MLS in half an hour. That’s not something you’d be able to do manually. This is technology that was built for property managers in order to make listings more efficient and easy.

What does the market look like? PJ suggests you check out the Rental Beast 2023 Market Report. He shared a few highlights:

There’s also a Sentiment Report, which reflects what people are feeling about the market and what might happen. They’ve found that 75 percent of the people surveyed believe rents will remain unchanged. Twenty-six of those surveyed believe applications for rental homes will decrease because fewer leads are coming through.

Concessions are also something to consider. Will you have to motivate renters to apply for your property?

The national median for concessions is around 18 percent. But, in some markets, 30 to 40 percent of active listings include some kind of concession. That’s artificially creating demand because it means nearly half the listings are offering some kind of concession. But, that’s not nationwide. For example, in Boston, only 8 percent of the active listings offer concessions.

As we discussed earlier, a lot of active listings are not professionally managed.

Could this be a blue ocean situation, where property managers can target these owners who are not using professional services right now? Ten years ago, property managers chasing FRBO business would have to pull ads from Craigslist or similar sites to get owner information. Or, you could buy databases from PMLeads.

If Rental Beast can capture so many self-managed listings, however, is there an opportunity for property managers to market themselves?

PJ says property managers are already using the platform to grab leads because of these advantages:

Maybe you specialize in one part of your city. The listings in the Rental Beast database can be sorted according to neighborhood. You can also set up alerts in the system so you know when a listing that meets your criteria shows up.

PJ says that based on the data he’s seen, the most important thing property managers can do now when renting out their properties is to be careful about where the rental value lands. He sees wildly fluctuating prices in a lot of markets. Remember that you’re competing with an entire market. So use as much data as you can.

If you’re interested in checking out the Rental Beast report, visit their website. You can also check out the Rental Expert Series, which is updated quarterly and includes several specific markets. To sign up to receive the next report, click here.

If you have any questions about marketing your property management, contact us at Fourandhalf. Thanks for joining us on The Property Management Show.

The post Rental MLS: A Threat or a Tool to Help Property Managers? appeared first on Fourandhalf Marketing Agency for Property Managers.

Two guests are joining The Property Management Show today, and they are Scott Brady and Garrett Brady from Progressive Property Management in southern California.

Scott has been on the show before, and tends to talk about forward-looking topics that involve challenging the status quo. Garrett is his son, and a big part of the company’s future.

The topic today is legacy planning, which can be rather difficult for property management companies. Scott and Garrett are sharing their journey and where they are.

Scott has a story that’s similar to many property management company owners. He began as a real estate agent and had a brokerage business. The recession arrived in 2010, and he wanted to be prepared for the next recession. So, he started Progressive Property Management in 2012. It became incorporated in 2015.

The company grew organically through marketing and relationships. Over the last 12 years, they’ve grown to about 1,000 doors under management. Garrett joined the residential side in 2018.

The business model is unique. It’s a virtual company that hires real estate agents to be property managers. Three years ago, they began an association management department, and now manage around 130 associations with about 7,000 owners, total. They use the same business model; people are hired to be off-site property managers for these communities. The team at Progressive takes care of all back office operations.

About three years ago, Scott was diagnosed with cancer, and he realized the company was not prepared to be sold or handed off. Decisions were made, and a choice had to be made: did Scott want to prepare the company to be sold, did he want to hire someone to run it while he lived off the cash flow, or did he want someone in the family to take it over?

He’s made a decision, and he and Garrett have been busy structuring their legacy plan over the last three years.

Garrett says the company – and the entire industry – was old school in 2018. There wasn’t a lot of technology, and everything was very regional. He’s been able to see the industry move from the stone ages to embracing modern technology. It’s a more appealing industry to join. So while it was a family business that he was happy to join, he now sees the value of real estate and how it interacts with so many other business sectors.

The diagnosis spurred the discussion around legacy planning.

Scott hired a consultant outside of the property management industry and the first thing he recommended was to have Garrett go to graduate school. This did not make sense at first, but it was pretty transformative. He earned his position with his education and his experience, not because of nepotism.

The next step was to invite Garrett to earn some controlling interest in the company. Every year that he’s worked for the company, he’s earned 2.5 percent ownership in that company. By now, he’s up to 15 percent. The idea was to have Scott maintain the controlling interest, but to give Garrett a path towards more ownership.

Garrett has skills that Scott doesn’t have, and they both recognize that.

Scott excels at sales and marketing while Garrett is all operations. Scott said he knew the future was in the company’s operations. With 130 associations under management, they need good systems.

Garrett does all the hiring of remote team members and he trains them, too. The company now has 13 remote team members and 13 full-time employees. The future isn’t expanding full-time payroll, but in hiring remote contractors.

Understanding his own skill set allowed Scott to bring Garrett in, and together they sit down and look for the next opportunities while ensuring everything is running properly.

Marc Cunningham mentioned to Garrett that he had to do a buy-in for his ownership in the family business, and so it made sense to Garrett that he would buy ownership over time with his time and with his commitment to the business. He says he gets more value out of learning how to run a business, deal with staff, and handle operations and corporate accounting. He’s happy to have that security for the long term, especially as the business grows.

It’s never a good idea to arbitrarily give ownership of your property management business to someone just because they’re family. Garrett is qualified, and that’s important. Scott says he’s the most qualified person to run the residential side of the business and manage the remote team members. He’s learning more about the association management side, and will eventually be comfortably with full ownership of the company.

It’s a perfect fit, with Scott on top of the sales and marketing and Garrett taking care of the operations.

That doesn’t mean that Garrett isn’t prepared for marketing the business. As a high school student and as an undergraduate, he took care of the direct mail for his father’s company and for other real estate businesses and brokers.

He’s also looking at other potential income streams. Maintenance, for example, is a big passion for Garrett. He’s looking towards the future and thinking about a point in which the company can introduce their own maintenance service.

Garrett knew that to create value, he had to do what his father could not do or would not do. He and Scott complement each other, and that’s what makes them successful.

Both Scott and Garrett see opportunities not in hiring people but in bringing on remote workers. Most property managers don’t see community associations with 8 to 20 owners as being a huge profit center. Progressive Property Management has found a way to do it.

Scott says that residential management is touch-and-go right now. No one is buying investment properties and there have been only a few sales. Association management is where new opportunities and potential earnings can be found.

Garrett appreciates that his father is willing to focus on long term goals. They’re saying within the company goes like this:

Garrett sees Scott as sometimes driving the bus at 100 mph. His job is to pick up the pieces that are sometimes flying off at such a high speed, and put them into place.

One of Scott’s favorite sayings is that the best times in business are when you’re uncomfortable. If you’re uncomfortable, it means you’re growing.

Both Scott and Garrett have some big ideas about ancillary companies, additional income streams, and creating new departments. How to balance innovation with the success of current operations?

It comes down to the team, Garrett says.

As they progress and grow, it all seems to works out. They’re comfortable with slow growth, and that’s important considering their business model is not traditional. Scott believes in managing processes rather than people.

It’s one thing to bring the person who will take over into the company and put them on a payroll and give them a position. But, how do you document the plan for succession?

For Progressive Property Management, there’s an informal and a formal plan in place.

The formal plan includes Garrett’s 2.5 percent ownership every year. That’s well-documented.

Informally, there have been many discussions about how things are meant to happen. If something terrible happened to Scott today, Garrett would be prepared to keep things moving the way they planned. Nothing is in writing, but everyone understands what will happen.

Garrett won’t have controlling interest for a while, but he’s naturally progressing in making more decisions. He says looking at things objectively helps. They know they’re not the only ones in this position. A lot of property management companies are wondering what will happen to their businesses. The choices are to have a good process or deal with a messy situation.

No one is going to last forever.

Garrett is looking forward to eventually not only exploring maintenance services but also commercial real estate. You might have heard the adage that commercial real estate a dollar business. Residential management is the dime business. And, association management is a penny business.

It’s okay to collect the pennies and dimes while everyone else is going after the dollars.

Scott says he’s always saddened by the industry and how little innovation there is. People follow the herd, and the herd moves towards residential management only.

Not a lot of challenges have popped up, but Scott and Garrett do believe in complete transparency.

Everyone knows that Garrett will take over. There’s no doubt about the company’s future, and the team members recognize that Garrett is good at what he does. They also know he’s dedicated. The company still has an emergency line that’s kept in-house. This is where they shine, according to Scott, and so they don’t outsource it. Garrett still has that phone on the weekends. He’ll take an average of five or six calls every day about water leaks and other emergencies. That shows his dedication and everyone knows he has that phone.

Garrett says he appreciates being able to spend time with his father while working and growing the business. That’s a perk that’s hard to quantify and it’s not an opportunity that most people get.

Scott acknowledges that he has always hated having business partners. But, he doesn’t mind now. Both he and Garrett know when to step in and when to step out.

Family can be emotional, but Scott and Garrett are both on the same page and in the right seats on their bus.

Scott has always been a proponent of not selling even with attractive offers out there, and he has some advice for property managers who are in a family business and thinking about their next steps: Don’t just hand it off. That’s a good way to drive your business into the ground. Make sure you’re handing it off to a family member who has bought into the business with their time and their labor, and make sure they’re qualified to run the company.

Garrett adds his own advice: have patience. Recognize what’s been put into the business and pay your dues just like you would in any other business. Have patience and know your value.

If you have any questions about what we’ve discussed with Scott and Garrett, contact us at Fourandhalf. If you’d like to hear more about what Scott and Garrett Brady are working on, or if you’re interested in some of their other business pursuits, get in touch with them at Progressive Property Management.

The post Legacy Planning for a Property Management Business appeared first on Fourandhalf Marketing Agency for Property Managers.

Marc Cunningham is a property management consultant and he’s also the President of Grace Property Management in Colorado.

He’s joining The Property Management Show today not only because he’s a prominent figure in property management, but also because he’s one of the first property management professionals who embraced video marketing.

Marc is still promoting video marketing, and he believes it’s the most effective way to bring new business into your company.

When Marc started his property management career as a child going to the office with his dad, things were incredibly different. It was the 1970s and buying their first copy machine was the most technology they had. The phone with an answering machine was fancy. Ledger cards were used to manually record when rent was collected, and checks were written to owners once a month.

His father recognized that technology was a great tool, and they not only got a computer before anyone else, but they also even hired a programmer out of California to write a custom property management program for them.

In the property management industry, there’s a big scare every couple of years.

The narrative goes, if you don’t do X, you’ll be left behind. Right now, it’s AI. If you’re not using AI, you’ll be left behind.

Marc says this is not always true. Provide good customer service to owners and tenants, and you’ll be okay even without the latest tool. You won’t wake up one day and be left behind.

It’s the shiny thing syndrome. If there’s something that everyone seems to be doing, you feel like you should be doing it, too.

It’s easy to chase the next big thing because everybody is talking about how cool it is.

Marc doesn’t chase the newest thing. Technology is something to leverage in order to improve your property management business.

After graduating from college with a degree in finance and real estate, Marc worked in the industry but not for his father. This helped him when it was time to go to work for his father. He brought a different perspective and a different set of skills to the family business. He always tells people in a family business to send the young people out to work outside of the business for a few years. It generates better ideas and higher level thinking.

Marc arrived at his father’s company with more of a business mindset. His father was very good at property management, and Marc found he was very good at business management.

Marc is one of the first property management professionals to begin marketing his company with video. He still believes this is the best marketing tool for property managers.

Here’s how it happened.

He was at a conference, and on the way home from that conference, he began thinking about how much time he spent talking to potential owner clients. They all ask the same questions and he found himself having the same conversation over and over again. Wouldn’t it be great, he thought, if, instead of answering those common questions over and over again, he could put those answers in a video and have it on his website. Then, potential owner clients could watch the video and decide if they wanted to know more. Marc thought that if a video could save him multiple five-minute conversations, it would really add up to getting some serious time back.

He’s action-oriented and he doesn’t over-think.

So, when he got home, he had his then-11-year-old son stand on his desk with an iPhone and take a video of Marc talking about common property management expenses.

It was a three-minute video that included no script, no special lighting, and no microphone. The point was not quality. The point was to get it done.

This has worked better than any other marketing, Marc says, because prospective owner clients will call, and they’ve already seen the videos. That puts them at about a 7 out of 10 in terms of likelihood that they’ll come on board as a client.

Those owners feel like they already know Marc and the company. Marc says he’s not afraid to tell people to use video more because he knows they won’t do it. His competitors don’t.

The reason this works for Marc, he says, is because he’s not a perfectionist.

If you believe in the power of action, you’ll get the videos done, and you’ll let the results fall where they may.

Video marketing has been successful by keeping the acquisition costs for each client down. There’s no need to spend a lot on marketing when you have a YouTube channel full of great video content. The video version of Marc is available 24/7, and that means that the real life Marc has time to focus on other parts of his business. One video could be equal to 20 conversations he didn’t have to have in real life. Even if the video results in zero leads, he didn’t have to have all those chats with people who would not hire his company anyway.

The willingness to make videos creates a filter. No property manager is designed to serve every owner. The training Marc does with his property managers internally is called We Don’t Sell. When a lead comes in, he doesn’t want the goal to be closing the lead. The goal is to get to know the prospect and to decide if they’re a good client to do business with. There’s no starting with a sales mentality.

Videos will:

Video also snowballs for marketing and SEO purposes. The more times those videos get watched; the more Google promotes the videos. When they’re promoted, they’re watched more. And on and on.

Remember that this is a public space. You don’t have to make perfect videos, but you also don’t want to insult anyone. Marc made a video called “Five Things to Never Say to Your Tenant.” He’s not an anti-tenant property manager, but he must have said something in that video to upset someone, because it went viral in tenant groups and he started getting really hateful messages and comments. So, he took that video down.

It’s a fine line to walk. You want to be cautious, but you also want your personality to show through. A video won’t be as effective if it’s scripted. If you want to do some bullet points for yourself before you talk on camera, do it. But don’t read a script or generate something from your computer. Talk the way you’d talk to a client. It can be intimidating, but it’s effective.

It’s effective, but people don’t do it. Most property managers don’t use this effective and untapped marketing tool because they’re too obsessed with making the perfect video and they can’t, or because it’s easier to run ads and pay Google.

Marc has two distinct categories of video. One is educational and one is an FAQ that outlines how he does things. They’re separate.

Under the educational content umbrella is the content marketing that appeals to both prospective owner clients and current owners. It works to market for new business and retain current business.

Here’s a soft rule he says to remember: When you make a video, decide if you can show it to both audiences – the prospective clients and the current clients. If the answer is ever no, then it’s not providing enough education. When you have this rule in mind, you’ll keep your video from being too sales-focused. You won’t say “call us for a free consultation” because why would say that to current owners? When you can say yes, it applies to both current and prospective clients because you’re talking about tenant screening or maintenance costs, then you know it’s an educational video.

Marc believes content matters. His videos won’t be about how great his company is or how many degrees he has.

Nobody cares.

He maintained one massive email group of all current clients, all previous clients, and all prospective clients. Anyone who has ever provided an email address is in the group. It doesn’t matter if they’re working with a competitor or self-managing or if they’ve been with the company for years. These videos educate everyone.

People want to be educated. They’re not going to call you because of your great technology. They’re going to call you because you posted a video with some information on a new law that matters to them.

Marc doesn’t invest a lot of time in making videos. He began doing two videos a month and he’d record them both at the same time, and they’d end up being seven or eight minutes each.

It’s not a production.

There’s a simple backdrop. There are some good lights. There’s a tripod and a microphone. There’s usually one take. If he stumbles over a word, he reps going. It does not have to be perfect, and that’s why it doesn’t take too long.

Slight imperfections keep the video conversational. If you can pretend you’re recording for a potential client, you’ll have an easy time talking to them.

Now, there’s only one a month that needs to be recorded because quite a library has been created. One hour every month is the time investment that’s required, and the video keeps working as soon as you put it out there. Marc says this is the only true evergreen marketing there is. Blogs and videos go on websites. They get shared on social media.

Videos are converted to blogs, but Marc says the video should come first. When someone reads a blog, they don’t necessary get a sense of who you are. Video shows them. And it doesn’t take much time if you’re not a perfectionist.

Sometimes, people will give up too fast. They’ll hate their hair. They’ll hate their voice. They’ll want to re-record over and over again.

Marc says get over that. You’re not auditioning for Hollywood. You’re trying to attract a new client, and it gets easier the more you do it.

Marc has some advice for when you’re making your video, and he even has some advice if you’re not feeling like you want to make videos at all.

Marc reminds all of us that he began video marketing with a wall, an iPhone, and an 11-year-old. If you want to save yourself time on marketing, there’s no better way to do it.

As a property management business consultant, Marc stresses the importance of video as a marketing tool, and he has another secret weapon that he’s surprised most companies don’t realize is so important.

That’s having a photo of yourself or your company or your team on your website.

It’s a big fail if you’re not featured on your site. People want to SEE who they’re doing business with. Get your picture on your site and let people know who you are.

The mantra for Marc is to be professional yet friendly. Those are the boundaries. You know where you fall. Maybe you trend more towards professional or more towards friendly. Bring yourself back to balance.

Another piece of advice: With content, whether it’s a blog or a video or a Q&A on your website, make sure you’re answering the questions that your potential clients have. You’re attracting investors and accidental landlords. Answer questions from both types of owners.

The accidental landlords aren’t thinking about themselves as investors. They lived in the house they’re about to rent out. They want to know who will be there and if they’ll take good care of the home. They’ll have questions about screening. Investors will have money questions. They’ll want to know what they’re spending on maintenance and how quickly you’re filling vacancies.

Answer those questions in your content.

Find out what people are asking right now. What conversations are you having with current and prospective owners? What keeps coming up?

Your potential clients are making decisions based on emotions. If you’re not marketing yourself this way, with video, then you’re only competition on price. People don’t choose your company because of your price. They choose your company because they know what you’re doing. You cannot expect them to turn over the keys to their greatest asset without knowing who you are.

Find Marc at PMBuild.com, which is their property management education website. You can also visit RentGrace.com, which is his property management website. Check out his videos and see how it’s done.

Marc’s parting words?

Get it done. Get it out there.

We appreciate Marc Cunningham coming onto the show. If you have any questions about video marketing or if you need help with this part of your business, please contact us at Fourandhalf.

The post The Power of Action Versus Perfectionism in Video Marketing appeared first on Fourandhalf Marketing Agency for Property Managers.

Welcome back to The Property Management Show. In our previous episode, we spoke with SEO and marketing guru Rand Fishkin about the shifting tides in digital marketing and the sources of influence that are important today. On the second part of our podcast with this guest, we’re talking about money keywords, vanity metrics, and generative AI. We’re also talking about how to make those immeasurable marketing channels a little bit more measurable.

Here’s Part Two of our interview.

Every business or industry has a set of money keywords that represents where and for what everyone in that industry wants to rank. That’s the bottom of the funnel. If you’re ranking high for property management and your city, you know that people searching for you are very close to choosing a property management company. That’s a good lead.

But, why go to the battlefield and fight with every other management company that wants the same keywords? There are other marketing strategies that can be leveraged.

Remember the blue ocean strategy. Go for those keywords that others aren’t paying attention to. Then, you won’t have to fight as hard and you’ll still draw in traffic from relevant searches.

It makes sense. However, people are so drawn to that battlefield.

Rand says this is how entrepreneurs are socialized and trained. It’s a cultural battle that’s hard to overcome.

To really improve website traffic and gain more leads, results, and profitability, you can rank for more than property management plus geography. When everyone else is chasing one thing, you can beat them all by doing something that none of them are doing.

Are you getting more subscribers and followers or engagement and not necessarily conversion?

In 2017, there was an article in the Harvard Business Review that talked about the actual value of a Facebook like for a business. Marketing researchers did a study to figure out whether it really contributes to a business in any meaningful way. They found that a Facebook like doesn’t necessarily reflect a change in consumer behavior or an increase in spending. Consumers who like a brand on social media, specifically Facebook, are simply expressing a pre-existing preference. If they see the brand, they like it. They were going to buy from you anyway, so of course they’ll like you on Facebook.

It’s much harder to convince someone who has never heard of you to like your page and then buy from you.

Rand points out that hidden in that study is that the measurement can be used to find out how many people are predisposed to buying from you, and who they are.

The Facebook like did not influence 300 new people to buy from you if they weren’t already planning to buy from you. So, it’s a vanity metric. It does not change behavior. But, it helps you measure.

By knowing that 300 new people liked your Facebook page in a month, you can measure the size of the pool of people who may buy from you. This can be useful in a campaign. You can measure what you’re doing that’s having a positive or negative impact. Measure those likes if you want a campaign that grows your brand’s likeability, awareness, and trust. Getting a Facebook like won’t get you more buyers. But, doing things that will encourage more buyers will result in a lift on social media. That’s notable.

This makes an otherwise unmeasurable marketing investment more measurable.

You can measure lift. If you see that traffic went up and conversion went up and the Facebook likes went up, that campaign worked, and you know that similar investments on other networks might be worth the effort. Or, when what you did last month did not work well, you’ll know to try something else. That’s where the value comes from. Instead of disproving the value of the metric, that study suggests there’s a lot of value.

If you’re focused on ranking number one on Google, that’s a problem because you want that metric to go up at all cost.

But, if you instead treat the metric as a way to measure the effect of what you’re doing, that’s going to give you some value.

Rand suggests that branded search volume is the better place for small businesses to focus right now. Instead of Hayward Property Management, he suggests working hard to rank for Marie and Brittany Property Management. When people are looking for your brand name, it means you are doing something right in terms of brand reach. More people are looking not for a generic term, but for you in particular.

Rand says he’d take one new searcher for his brand name over a hundred searches for the generic keyword combo. That’s the bottom of the funnel and the closest you’ll get to conversion. If he searches for a Google Pixel Phone 6, that’s more valuable to the brand than a search for best new android phone 2024.

One of those search terms suggests that the buyer has already made their decision. He knows what he’s looking for. That’s the most valuable kind of marketing you can do. Get people to know, like, trust, prefer your brand over others. Be present in the places they pay attention with a message that resonates with them at the right time. That’s not going to be property management Orlando, Florida.

Remember:

Rand believes that it’s nearly impossible to know what causes a person to convert and buy, and that’s why he doesn’t worry too much about attribution. He returns to his basic message:

Be present in the right place with the right message at the right time.

To know if you’re doing that, you can look at your vanity metrics and look for the lift that should come before the rising conversions arrive.

Rand believes that marketing is a field in which you should follow crowds and not try to lead them.

What he means by that is until your audience is present and having relevant conversations in a place, you don’t need to try and reach them in that place. Why spend time there if your audience isn’t there?

In 2010, everyone thought they had to have a mobile app. They didn’t Most companies are just fine with a mobile-friendly website.

The same thing happened more recently with NFTs and blockchain. Marketers were sure they had to be using blockchain somehow but they couldn’t explain why. Does it make your customers happier or give them a better experience? If not, you don’t need it.

Now, we’re looking at the ease with which anyone can use generative AI.

Generative AI can solve some problems. If you have a database of 100,000 rental properties all over the country and you want to classify them quickly, you might want to hand-classify 100 of them, and then have ChapGPT do the rest of it based on your rules.

But, why would that be on your website?

We all know that when it comes to content, generative AI is the very bottom of the floor. It’s the worst content out there. Some humans can produce worse things, but anyone can make generative AI content for no money, so it’s the worst you can have.

Your goal, when it comes to content, must be to ensure everything you produce is better than that.

What’s wonderful for people who invest in marketing is that the more people who make their content with generative AI, the easier it for everyone who doesn’t to stand out. When you’re relying on generative AI to craft your message, you’re essentially taking yourself out of the game. You’ll be outranked and out-marketed. You’ll be the crappy competition that no one has to worry about.

Using generative AI for programming assistance or to understand a concept makes sense. It can tell you what words are likely to come after other words on the internet. It can analyze data. But, to write copy that you would expect someone to read while considering a new property management company? No.

AI looks for tokens coming after other tokens. It does that predictively. What they told you is what their suggestions told them, and it’s essentially a spicy auto complete.

It will never be unique, and the whole point of marketing your company is to be unique.

And that is all we have for our Part Two episode of the Property Management Show with Rand Fishkin. If you aren’t already a subscriber, please become one and give us a like. If you have any questions, go ahead and contact us at Fourandhalf.

The post Shifting Tides in Digital Marketing with Rand Fishkin Part 2 appeared first on Fourandhalf Marketing Agency for Property Managers.

Marie Tepman and Brittany Jones are on The Property Management Show, interviewing Rand Fishkin, co-founder of Moz and founder of SparkToro, about the changing landscape of digital marketing.

This is only Part 1 of our discussion, which includes a look at the shift from SEO-centric strategies to a more diverse approach, the distinction between platforms of influence and entertainment, and the challenges of marketing attribution.

Rand Fishkin is a name that’s synonymous with the world of SEO and digital marketing. He founded Moz, which revolutionized SEO tools and education for marketers. He wrote a book called Lost and Founder, an honest take on what it’s like to be part of the start-up world and follows the journey of a founder.

Recently, he’s been making waves with his new venture, SparkToro, which is changing the way marketers like us understand and target different kinds of audiences.

For the longest time, Rand was a prominent voice in SEO and content marketing. He was known to say that everything starts with keywords and data. Recently, there’s been a pivot to the opposite sort of thinking. We asked him to explain his pivot and his new view on digital marketing.

When you have a hammer, every problem looks like a nail. In the world of digital marketing, there are hundreds of channels and opportunities to reach an audience and build a brand and show off. Because he was addicted to and grew up in the SEO world, his focus was on:

It was all viewed through the SEO lens when it came to marketing.

Two things happened to cause a pivot in the way he approaches digital marketing:

These forces combined to mean that SEO is not the golden opportunity it once was. If you’re creative and entrepreneurial, you look for other opportunities. That’s what Rand has done.

Let’s talk about TikTok.

This has been a rising trend, and there are also reels on Instagram and shorts on YouTube that are popular. These are not sources of influence for businesses; they’re very particularly focused on entertainment.

The content there is not similar to the content that you might see if you are doing SEO things or business to business marketing or even participating in other platforms like Reddit or LinkedIn or YouTube or Threads, which is more like the old version of Twitter.

Unlike entertainment platforms like TikTok, those other platforms are serving niche functions. You might find botanists in U.K. clustering around a few account on Threads and some YouTube channels and some SubReddits. They’re all following the same sources, and all of the conversations are focused in that field.

That’s not what happens on TikTok. There, you’re looking for distraction for 7 to 70 seconds. You see a series of videos to distract and entertain. The botanists don’t cluster there. They’re on TikTok, maybe, but they’re like the rest of us, watching a chipmunk dance with a squirrel.

On YouTube or on a SubReddit, you’re subscribing to get specific and curated content. TikTok is prioritizing not what you necessarily want to see, but what will guarantee that you stay on the site and scroll to the next video.

TikTok followership is the lowest value of any social network that has existed yet. That’s the entertainment mindset that drives people there. It’s not going to help a property management company find new owners.

When we talk about entertainment networks versus networks that are a source of influence, you have to think about the places where you’re having relevant conversations. If you’re a marketer in property management, you care less about reaching the broadest possible audience for a few seconds. You want to be present in a highly relevant space where important conversations are going on.

If you’re trying to attract property owners to your rental management company, Rand would put TikTok lower on the list of platforms where you want to appear. Try LinkedIn or Reddit or YouTube. Start an email newsletter and get on podcasts.

Service businesses have a specific market, so if you’re putting all of your effort into a platform like TikTok, do you really think those TikTok followers going to work with you?

Trends like TikTok do a great job of creating a psychological panic among marketers. They think they have to chase trends.

You don’t.

Remember this:

Marketing is fundamentally about going to the right places with the right message at the right time to reach the right audience.

So, you can wait. Just because it’s popular doesn’t mean it’s for you.

Marketing attribution is a complex problem, according to Rand, and relying solely on attribution dashboards can be misleading.

Channels that have an incentive from the platform or network to show you attribution with always be overweighed. Google or Meta advertising will show you fantastic data in the dashboard about every ad you buy. They’ll tell you who saw it, who visited your site, who converted. The tracking pixel shows you all that. Those channels look like they contribute a ton of new business to you.

BUT, here’s the thing.

You would have earned a lot of that business anyway.

Rand says that if you s hut off that marketing spend for a month, you’ll likely get 91 percent of the conversions that you were seeing with the spend.

These companies are good at knowing what the customer journey looks like.

They have data about where people go and what they do. So, they can do a great job of making sure your advertisement is seen. But, they’re taking credit for sales that were already going to happen.

These online advertising platforms do create a wider potential audience for you. But not as large an audience as they claim. Choose relevant marketing channels and focus on lift-based measurement rather than relying solely on attribution dashboards.

This attribution problem has always been a challenge. What actually changed a consumer or business owner and got them to buy? You can do all the sophisticated measurements you want, but Rand says he believes it often sounds like pseudo-science. If you’re investing hundreds of millions of dollars a year in an advertising spend, you can make reasonable estimates. But the models are not compelling if you’re a small or medium-size business.

So, you don’t have to prove every attribution. We know marketing works. You know it too, even if it’s hard to prove.

There’s a great Wanamaker quote that goes: “I know that I’m wasting half my advertising spend, but I don’t know which half.”

Rand encourages you to waste half and not worry about which half is being wasted. Put it into channels that you think will reach your audience. Occasionally shut things off to see what happens. This is the only way to truly and logically invest.

Turn off any given advertising channel for 60 to 90 days in a business to business service world. See what happens.

Instead of obsessing over ranking for money keywords, focus on generating leads and increasing brand strength through diverse marketing strategies.

Everyone wants to rank for the money keyword. For our industry, maybe it’s property management in San Francisco or Austin property management.

There’s an obsession with ranking at number one. It doesn’t matter what you’re ranking. What matters is the business you’re generating. Focus on that.

That’s a far superior strategy. Get more leads and you don’t have to show your competitors that you’re ranking for the vanity terms that everyone is chasing.

That’s the strongest position to be in. You’re not only competing with other property managers, now. You’re competing with the zero click search or AI-generated results or the paid searches that always go above any organic ranking.

The obsession with being ranked at the first spot is vanity, and that’s a powerful psychology. Stop trying to look good and work harder at providing the best services.

That was a lot of information. So, we’ll pause. There’s a lot more to discuss with Rand. We’ll continue our discussion on money keywords, vanity metrics, and AI. We’ll also talk about how to make the immeasurable – measurable.

If you have any questions about this podcast or you need help with your property management marketing, please contact us at Fourandhalf.

The post Shifting Tides in Digital Marketing with Rand Fishkin appeared first on Fourandhalf Marketing Agency for Property Managers.

Welcome back to The Property Management Show podcast, your go-to source for all things property management, entrepreneurship, and marketing. This podcast is proudly brought to you by Fourandhalf, a leading digital marketing agency specializing in property management. Fourandhalf has been instrumental in helping residential property managers generate more leads and attract quality property owners since 2012.

Our hosts Marie Tepman and Brittany Jones recently welcomed Courtney Wolf, founder of RentWise Property Management in Idaho, to their show to discuss Courtney’s journey to successfully creating a hands-off business.

Courtney runs a thriving property management company in Boise that she has gotten to a point of running itself. When asked to expand on the steps she took to make this dream a reality, Courtney shared that it started with big dreams that were broken down into “biteable, doable, and reachable goals.”

Running a property management company is an extremely demanding job. You have to coordinate maintenance, place lockboxes, do showings, answer all phone calls…the list goes on. It’s not uncommon for property managers to experience total overwhelm trying to juggle it all.

Courtney knows exactly what this feels like. When her Idaho-based company first launched, Courtney was a basically one-woman show doing absolutely everything needed to keep things running. Courtney knew something had to change for the business to be sustainable and for her to have any sort of work-life balance.

Courtney started RentWise property management as the sole employee, handling all aspects completely on her own:

At the same time, her eventual Operations Manager, Carly, would work at the office answering all calls and managing day-to-day relations. The lean team worked hard but constantly felt overwhelmed and overburdened trying to self-manage everything.

Courtney shares the catalyst for taking her business virtual was Carly approaching her, feeling completely burnt out and ready to quit. Carly felt she had no freedom or work-life balance between her full-time job and demands at home.

Facing losing her right-hand employee, Courtney realized if she wanted to retain top talent long-term, she needed to rethink how she structured her business.

Courtney’s first step was engaging an experienced business coach. She needed someone who could hold her accountable to goals and break down her big-picture virtual vision into smaller, tactical steps.

Together they mapped out:

Setting this strategic foundation with her coach gave Courtney clarity and confidence to systematically build her virtual model.

A key component enabling Courtney’s shift to virtual was curating the right staff across her organization, specifically:

Getting complete support and dedication from her operations manager Carly was essential. Courtney focused on aligning their individual visions for the business and what lifestyle they wished to create.

Courtney offloaded tasks like property inspections and maintenance via her side company Taskmasters. Being able to outsource redundant or specialized work freed her core team to focus on high-level management.

Courtney credits clearly defined processes as central to her eventual hands-off role. Here are the key benefits she experienced from comprehensive documentation:

By detailing procedures to a “five-year-old” level of simplicity, Courtney could easily hand off tasks to virtual assistants and Taskmaster employees without extensive training.

Highly specific checklists and protocols allowed both in-house and outsourced staff to seamlessly meet expectations and performance standards.

Steps that created bottlenecks or redundancy jumped out clearly when every facet was scripted. Courtney could then refine or automate these areas to fill gaps.

With all guidelines compiled in one place, Courtney’s staff always knew the exact requirements for any task or scenario, letting them operate confidently.

Once all critical activities were documented, Courtney could remove herself completely from day-to-day operations. Her priorities shifted fully to growth vs putting out fires.

While tedious, Courtney made writing full standard operating procedures foundational before looking to outsource or automate.

In addition to systems and staffing, Courtney credits technology as the third component allowing her to go virtual. When launching RentWise, solutions like self-showing lockboxes and inspection apps were just hitting market.

Being open to trying these emerging platforms (even when they seemed a “hard sell”) meant Courtney’s systems integrated cutting-edge tools from day one for maximum efficiency.

In addition to RentWise Property Management, Courtney founded a complementary business called Taskmasters. Taskmasters offers outsourced property management support services tailored to assist busy property managers.

Taskmasters began organically when Courtney realized performing routine site visits herself was an ineffective use of her time and capacity. She started training her existing handyman to conduct inspections to her exact specifications.

Once the handyman demonstrated consistent success inspecting based on Courtney’s guidelines, she considered turning this outsourcing solution into an actual business venture.

Initially Courtney deliberately kept Taskmasters small, serving just her inner circle of property manager connections. However, over time as more property management companies embraced outsourcing for supplementary services, interest in Taskmasters picked up.

Seeing tangible results from delegating tedious property visits gave Courtney inspiration that formally offering these type of outsourced field services could benefit numerous property managers facing similar capacity issues that she once did.

While still focused on gradual, organic growth for now, Courtney has bold plans to eventually scale and franchise the Taskmasters model into new markets nationally. Her first-hand experience identifying gaps as a property manager owner enables her to craft solutions uniquely tailored to this industry’s needs.

At multiple points in the interview, Courtney emphasizes the importance of building strong networks and surrounding yourself with the right community to accelerate success.

Specifically regarding the property management industry, Courtney highlights NARPM as an invaluable network that has facilitated much of her growth and enrichment over the years.

Courtney shares that initially she struggled for three years trying to “do things the hard way” before discovering NARPM. Connecting with this network helped her identify solutions already in existence rather than attempting to reinvent wheels.

Having a community to tap into for guidance supports overcoming recurring pitfalls through shared wisdom.

Courtney also notes the power of brainstorming ideas within a mastermind of peers familiar with industry-specific pain points. By coming together to explore common problems from different angles, new concepts and technology often emerge organically.

As an engaged member early on, Courtney was able to ride a wave of innovation as property management platforms rapidly advanced over recent years.

In summarizing key catalysts behind her success, Courtney firmly lists surrounding herself with collaborative groups like NARPM as instrumental. The intersecting perspectives within these communities consistently sparked breakthroughs to progress her business.

Courtney summarizes the key building blocks central to her eventual self-managed enterprise included:

With these pillars serving as foundation, Courtney successfully shifted RentWise’s operations completely off her plate, freeing 100% of her capacity towards growth efforts. Use Courtney’s blueprint to examine your own business processes and team dynamics assess what components need addressed to construct your own “hands-off” property management company.

Courtney Wolfe’s journey shows that with the right systems and support team in place, property managers can transform into CEOs of streamlined, scalable companies.

By identifying areas of overload and redundancy, Courtney was able to break down day-to-day tasks and build processes to outsource what bogged her down. Detailed procedures allowed her to leverage assistants to capture back time. And embracing new technologies maximized efficiency allowing her core team to focus on big-picture strategy.

Courtney’s message is clear: freedom requires a foundation. Construction begins as simply as documenting your procedures from a to z as if training a child. The clarity and insight uncovered in that exercise can spark incredible transformation.

Thank you for joining us on this episode of The Property Management Show podcast. If you have any questions, comments, or need assistance with marketing your property management company, please don’t hesitate to reach out to us at Fourandhalf!

The post Property Management Business Owner’s Ticket To Freedom appeared first on Fourandhalf Marketing Agency for Property Managers.

Hello and welcome to The Property Management Show podcast, your go-to destination for exploring the dynamic world of property management, entrepreneurship, and marketing. Brought to you by Fourandhalf Marketing Agency, a leader in the industry since 2012.

Fourandhalf helps residential property managers get more owner leads and improve their online presence through website design and development, SEO, online reputation management, video and blog content, social media, and targeted advertising.

In Part 1 – Maximizing Profits with Mid-Term Rentals: Property Management Blue Ocean Strategy, our guest speakers Jessica Schirmeister and Jason Zimmerman from Trend Property Management in Texas discussed the growing trend of mid-term rentals. These types of rentals, also known as furnished rentals, have become increasingly popular in recent years.

That episode highlighted the unique niche that mid-term rentals occupy, situated between short-term and long-term rentals. Key focus areas included the demand for these types of properties, their profitability potential, and the evolving rental market trends influenced by remote work and lifestyle changes. The episode provided foundational insights into the benefits, challenges, and operational dynamics of managing mid-term rentals.

In this episode (Part 2), we’ll delve deeper into the operational challenges and strategies for managing mid-term rentals. We’ll discuss finances and the subtle art of balancing tenant rights with property management objectives.

Part 2 starts with a discussion about the financial feasibility of investing in mid-term rentals and ensuring a reasonable return on investment (ROI). Jessica shared an example of how a month-long tenant could provide up to four times the revenue compared to a traditional annual lease. However, she also emphasized the necessity of factoring in additional costs such as furnishing, utilities, and cleaning fees when evaluating the profitability of mid-term rentals.

Jason stressed that property managers should be strategic in their investment, considering the demand and market conditions. It’s important to understand potential risks and always have a backup plan in case the rental doesn’t succeed as expected.

Investing in mid-term rentals is an intriguing proposition, blending the stability of long-term rentals with the higher earning potential typical of short-term stays. For property managers and investors, understanding the financial landscape is key. This involves assessing the initial investment costs against the potential returns. Mid-term rentals often demand a higher rental rate, reflecting their furnished status and flexibility. This can be an attractive proposition for tenants looking to avoid long-term commitments.

While discussing the financial aspects of investing in mid-term rentals, Jessica and Jason also shed light on the pros and cons of furnishing a property.

To get an initial understanding of whether furnishing a rental makes sense, evaluate if the property in question can generate an additional $4,000 or more each month. Jason says that after evaluating over 50 deals, this seems to be a key threshold for justifying the investment in furnished rentals.

Here are some other key financial aspects that were discussed during the interview:

It was noted that the fixed costs associated with a property do not necessarily decrease with a less expensive property. These fixed costs can erode the benefits of furnishing a property if the additional revenue generated doesn’t sufficiently cover these expenses.

Looking at the big picture, furnishing a property starts to make even more financial sense when it can generate significant additional revenue – in the range of $50,000 to $70,000 a year. This extra gross revenue is needed to cover all additional expenses such as utilities and other costs associated with furnished rentals.

One of the strategic financial advantages discussed was the ability to significantly increase the rental value of a property through furnishing without correspondingly increasing the property tax base or insurance expenses. Most property improvements and upgrades can translate to higher insurance or property taxes, and this puts furnishing in a unique spot.

This aspect is particularly important as it implies that furnishing a property can lead to higher income without proportionally higher ongoing costs.

In addition to financial considerations, you should also think about the long-term goals of the property owners. Key points from this part of the conversation include:

The decision to convert a property into a furnished rental is often influenced by the owner’s specific financial objectives. For some, an increase in net profit of around $5,000 a year is a benchmark that makes the investment worthwhile. However, this threshold can vary among different property owners, depending on their individual financial goals and circumstances.

Another critical factor in this decision-making process is the owner’s long-term strategic plan for the property. If an owner intends to keep the property in excellent condition for an extended period, such as for inheritance purposes, they might be more inclined to furnish it. The rationale is that a furnished property can be maintained at a much higher level, ensuring its longevity and preservation over the years.

These considerations highlight the importance of aligning the decision to furnish a rental property with the owner’s long-term financial and strategic objectives. It’s not just about the immediate returns but also about how this decision fits into the broader picture of their property management and investment goals.

Having explored the financial considerations and owner’s objectives in detail, it becomes clear that the decision to venture into mid-term rentals is multifaceted. Now let’s dive into the nitty gritty of what types of furniture will and will not work for a furnished rental property.

When it comes to furnishing rental properties, it’s a delicate balancing act between expense and attractiveness. Quality furnishings and amenities can significantly increase a property’s appeal and rental value. The key is in finding the sweet spot – investing enough to make the property desirable and competitive, while ensuring that these costs are recouped through higher rental income and occupancy rates. This strategic approach to investing can lead to enhanced long-term profitability.

We know the thought of using old furniture may have crossed your mind, or at least the property owner’s mind. We don’t blame you. Jessica shared that it’s common for property owners to consider using their existing furniture to save costs. However, several important points were raised about the potential drawbacks of this approach:

It was emphasized that for rentals charging higher rates (e.g., $4,000 and above), tenants expect a certain level of quality and aesthetics. Using old furniture with visible wear, like stains or damage, could lead to negative reviews and dissatisfaction among tenants.

The conversation also underscored the importance of effectively communicating with property owners about the standards expected in furnished rentals. It’s crucial to explain why old furniture might not be suitable and how it could impact the tenant’s experience and the property’s appeal.

Our guests suggest asking a very simple question “Why don’t you want to use this in your own home?” This straightforward query can help property owners understand why it may not be suitable for a rental.

It’s also essential to consider the potential costs of maintaining and repairing old furniture if it breaks down during a tenant’s stay. These expenses could add up over time, making it more cost-effective to invest in newer, higher-quality furnishings.

The speakers discussed the possibility of using some of the owner’s existing furnishings, but not all. The selection process involves assessing each item to ensure it meets the required standard for the rental market.

Part of the property manager’s job is guiding owners through the process of updating their furnishings, including providing them with estimates for new furniture. This helps owners understand the financial implications and the value added by investing in quality furnishings.

Here are several tips and tricks to help identify the best furniture options for mid-term rental:

In conclusion, furnishing rental properties requires a combination of strategic planning, understanding market demands, and investing in quality pieces that will withstand heavy use. By aligning the owner’s objectives with these factors, mid-term rentals can provide a profitable and attractive option in the evolving rental market. So, property managers need to stay updated with industry trends and continually adapt their strategies to cater to emerging demands.

Mid-term rentals require a business mindset. This means understanding the financial aspects of investing in furnishings and ensuring that these costs are recouped through higher rental rates and occupancy rates.

Additionally, treating furnished rentals as a business also involves focusing on guest satisfaction and continuously making improvements to the property to meet market demands.

Our guest, Jason, provided the perfect analogy to help drive home the point. He likened starting a furnished rental business to opening a restaurant, emphasizing the need for good-quality furnishings, much like a restaurant needs good tables and chairs. This analogy highlighted the importance of viewing furnished rentals not just as properties but as full-fledged businesses that require investment in quality assets.

One significant advantage of furnished rentals is the potential for tax benefits. Property managers and owners can take advantage of depreciation deductions on furniture, effectively reducing taxes owed on rental income.

Jason suggested that property owners consult with their CPAs to understand how investing in furniture (e.g., a $45,000 investment) can be depreciated. Unlike real estate property, which is depreciated over several decades, furniture typically has more favorable depreciation schedules, allowing for faster recovery of investment through tax benefits.

Investing in furniture for a rental property can be a smart way to add value to the property, especially if the owner has funds available for investment but is uncertain about the best way to utilize them. The depreciation aspect makes this investment more financially attractive and can be a strategic way to enhance the property’s value. Additionally, furnishing a rental property can also increase its overall appeal and attract more desirable tenants.

Viewing mid-term rentals as a business opportunity that requires strategic planning, understanding market demands, and investing in quality furnishings can lead to success.

Now that we’ve talked about the business side of things, let’s talk about the other piece of the puzzle: your renters.

In the realm of property management, especially in the context of mid-term rentals, a crucial yet often delicate aspect is striking the right balance between tenant rights and property management objectives.

The core of this discussion revolved around the principle of ‘quiet enjoyment,’ a tenant’s legal right to use and enjoy a rented property without undue interference. This principle is a cornerstone in real estate and applies universally, regardless of whether the arrangement is short-term or mid-term, and whether the occupants are referred to as guests or tenants.

Quiet enjoyment refers to the tenant’s right to use the property as intended without unnecessary restrictions or intrusions from the landlord. It’s a foundational concept that underscores the tenant’s autonomy over the rented space during their tenancy.

Marie and Brittany shared a recent Airbnb experience where they were not allowed to wear shoes inside the house and they were also not allowed to adjust the thermostat freely. These seemingly minor restrictions significantly impacted their overall experience and their satisfaction with the property.

A critical insight from the podcast was the emphasis on recognizing the inherent landlord-tenant relationship in property management. This relationship holds, irrespective of the rental’s duration or how the occupants are labeled. Every tenant, whether in a short-term Airbnb setup or a mid-term rental, is entitled to specific rights, which include the use of the property as designed.

The discussion highlighted a common challenge for those new to property management or hosting. Many enter the field without a formal real estate background, which can lead to a lack of awareness about fundamental tenant rights. This knowledge gap can inadvertently lead to infringements on tenant rights, such as unnecessary meddling in the tenant’s use of the property.

For property managers, the key takeaway is the need to balance effectively managing their properties while respecting the tenants’ rights. This balance is essential not only for maintaining a positive tenant relationship but also for adhering to legal standards in property management. Recognizing and respecting tenant rights, such as quiet enjoyment, plays a crucial role in successful property management and ensures a harmonious landlord-tenant dynamic.

Property managers must navigate the fine line between upholding tenant rights and ensuring their own objectives are met. This may involve setting clear expectations from the beginning, regular communication with tenants, and addressing any issues promptly and professionally.

Privacy is a fundamental aspect of the rental experience, especially in mid-term rentals that serve as a temporary home for renters. It forms a crucial part of the tenant’s right to quiet enjoyment, and violations can significantly impact their satisfaction and overall rental experience.

As a property manager, you should ensure that the tenant’s privacy is respected at all times. This includes avoiding unannounced visits or inspections, and not restricting tenants’ use of the property unless necessary for maintenance or other justified reasons. Respecting privacy not only helps build trust and a positive relationship between the tenant and the landlord, but it also contributes to attracting and retaining quality tenants. A rental arrangement that respects privacy can set your property apart in the competitive rental market and help enhance your overall business success.

An interesting anecdote was shared by Jason Zimmerman about his personal experience with video surveillance in a rental property. This segment of the conversation sheds light on how surveillance can impact the guest experience and, in turn, the property’s reviews and reputation.

Jason recounted an incident that occurred while he was staying at an Airbnb for a funeral. He had family members come over to the rental property so they could travel to the funeral together. However, the rental’s host sent him a notice, having observed six people entering the property through the doorbell camera. This intrusion prompted Jason to unplug the modem, essentially saying, “leave me alone.” His reaction stemmed from a feeling of being monitored or stalked, which is a common discomfort among guests in such scenarios.

This story highlights a crucial aspect of guest relations in the rental business. Surveillance, intended for security purposes, can often cross the line into privacy invasion, leading to guest discomfort. Such experiences can be particularly jarring for guests who are there for sensitive occasions, like funerals.

The conversation points to the need for property managers to carefully consider their approach to security measures like video surveillance. While ensuring property safety is important, it’s equally crucial to maintain a level of privacy and trust that guests expect. Infringing on this trust can lead to negative experiences, as demonstrated by Jason’s reaction to being monitored.

Instances like these can significantly affect a property’s reviews and overall reputation. Guests who feel their privacy is invaded are more likely to leave negative feedback, which can deter future potential guests. The story shared by Jason underlines the importance of respecting guest privacy and carefully evaluating the use of surveillance equipment in rental properties.

The key takeaway from this discussion is the importance of prioritizing tenant privacy in furnished rental properties. While security is a valid concern, it must be balanced with the need to provide a welcoming and private space for tenants. Intrusive surveillance measures can undermine this balance, potentially harming the relationship between the landlord and tenant, and ultimately affecting the property’s appeal and reputation.

In the rental industry, particularly in furnished and mid-term rentals, guest reviews play a critical role. Positive reviews can significantly boost a property’s reputation and desirability, leading to higher occupancy rates and rental income.

Attention to detail and responsiveness to tenant needs are paramount. Property managers are often tasked with addressing maintenance requests promptly and efficiently. This proactive approach not only ensures tenant satisfaction but also helps in maintaining the property in top condition, thereby enhancing its long-term value.

To encourage positive reviews from guests, it is essential to:

Furnishings should not only be functional but also aesthetically pleasing. This enhances the overall appeal of the property and contributes to a positive guest experience.

Comfortable furniture and well-equipped properties are more likely to receive positive feedback from guests.

Addressing maintenance issues and guest queries promptly shows attentiveness and care, leading to better reviews.

Clear communication about property rules and amenities helps in setting the right expectations, thereby reducing misunderstandings and negative reviews.

Encouraging guests to share their experiences and suggestions can provide valuable insights for improvements and also show guests that their opinions are valued.

As with any business, it is essential to understand the legal and regulatory landscape that governs mid-term rentals. This understanding can help property managers ensure compliance and avoid potential legal issues.

In the podcast, when asked about the potential for increased regulation in mid-term rentals similar to what has been seen in short-term rentals, Jessica Schirmeister and Jason Zimmerman provided insights into the current state and future possibilities.

Jessica Schirmeister, one of the speakers, highlighted that regulations over rentals could come from two main sources: the city and homeowners’ associations (HOAs). She emphasized the importance of being aware of the specific rules and regulations set by these entities. In client meetings, they often check the city’s regulations and the HOA rules to ensure compliance.

She urges other property managers and investors to conduct diligent research and compliance checks with both the city and the relevant HOA as a starting point.

A crucial point noted in the discussion was the prevalence of a 30-night minimum stay requirement, often seen in both city rules and HOA regulations. This requirement seems to be a common benchmark distinguishing short-term from mid-term rentals, with mid-term rentals typically starting at stays longer than 30 nights.

Property managers and landlords must be aware of this threshold to ensure compliance with regulations.

Jason Zimmerman provided insights into the anticipated trends in the mid-term rental market. His perspective was rooted in the current usage patterns and market developments.

One of the key points Jason raised was the similarity in tenant activities between mid-term rentals and traditional 12-month leases. Whether it’s for six months or a year, the impact on neighborhoods and the way tenants use the properties are quite alike. This observation suggests that mid-term rentals are unlikely to cause significant disruptions or attract undue regulatory attention, maintaining a level of stability akin to long-term rentals.

Given these similar usage patterns, Jason expressed his view that mid-term rentals might not face the same level of regulatory challenges as short-term rentals. Short-term rentals are often scrutinized for their potential neighborhood impact, but the consistency in tenant behavior in mid-term rentals could spare them from such intense regulatory focus.

Looking towards the future, Jason highlighted a growing trend: the increasing demand for furnished homes for various lease durations. This trend, particularly evident in college markets and upscale areas over the past decade, points to a robust and expanding market for mid-term rentals. The demand for furnished homes, suitable for a range of leasing terms, is on the rise, signaling a significant growth opportunity in this sector.

As we wrap up this episode on the vibrant world of mid-term rentals, it’s clear there’s a lot to get excited about. From savvy investment strategies to the fine art of balancing tenant needs with business goals, mid-term rentals offer a world of opportunity for the savvy property manager.

We’ve navigated through the nuts and bolts of furnishing, tenant privacy, and the all-important reviews that can make or break your property’s rep. Plus, we’ve tackled the ever-changing legal landscape to keep you in the know.

Thanks for diving into this rental adventure with us!

If you haven’t subscribed to our newsletter yet, head on over to https://fourandhalf.com/subscribe/ to make sure you don’t miss future episodes of The Property Management Show Podcast.

P.S. If you are looking to get more owner leads, improve your online visibility, and grow your property management business, fill out the form below to see how Fourandhalf Marketing Agency can help you reach those goals.

The post Mid-Term Rentals Part 2: Strategies for Success in Managing Furnished Properties appeared first on Fourandhalf Marketing Agency for Property Managers.

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Welcome to The Property Management Show podcast, where we delve into the ever-evolving landscape of property management, entrepreneurship, and marketing.

This show is presented by Fourandhalf Marketing Agency. Since 2012, Fourandhalf has been helping residential property managers get more owner leads by helping with their website, SEO, online reputation, video and blog content, social media, and paid ads.

For this podcast episode, we were fortunate to have Jessica Schirmeister and Jason Zimmerman from Trend Property Management in Texas join us for this discussion. With their extensive experience in the field, they brought a wealth of knowledge, particularly in managing and optimizing mid-term rental properties. Their insights are especially relevant for real estate investors and property managers looking to expand their portfolios and increase profitability.

As you can imagine, there was a lot of information to unpack which is why we divided the interview into two episodes. This is Part 1, where we explore the rising trend of mid-term rentals and their advantages over traditional rental models.

With economic and regulatory factors pushing both short-term and long-term rental property owners and managers to panic, it makes sense to start looking for more lucrative and sustainable alternatives in the market. This is where mid-term rentals come into play, offering a sweet spot between short-term and long-term rental properties. But what exactly makes a rental, well, mid-term?

Traditionally, short-term rentals are fully furnished properties renting for less than 30 days, whereas long-term rental properties are typically unfurnished and covered by a 12-month lease. Mid-term rentals are those that fit somewhere in the middle — fully furnished properties that can be rented for 30 days up to a year.

If you’re a bit confused, you are not alone. I (Marie) was confused as well. You see, the label “mid-term” makes it seem like the term or the length of the lease defines what category the rental property belongs to. But if a mid-term rental can be rented for up to a year, then doesn’t it fall under the long-term rental category? According to our guests, that is a “no”.

As it turns out, even they don’t like using the label “mid-term rentals”. Instead, they prefer the label “furnished rentals”. This is because lease duration can easily be shifted, but renting a property as furnished vs. unfurnished offers a clearer way to categorize them.

Now you might be thinking, who would want to rent a furnished house anyway? Don’t people typically have their own stuff to fill a house with?

Let’s dive deeper into this.

In the world of furnished rental properties, the tenant pool is as diverse as their reasons for renting. From this podcast interview, we learned that furnished rentals are a hit among various groups — and despite what you may have heard before, it’s not just for travel nurses anymore!

Here’s a rundown of who these tenants are and why they choose furnished rentals:

Each group’s unique needs make furnished rentals a versatile choice in the housing market.

So now that you know who typically rents furnished rental properties, let’s explore how these types of rental properties compare with more traditional ones.

The landscape of property management has witnessed significant shifts, and understanding these comparative dynamics can empower property owners, property management businesses, and real estate investors to make informed decisions.

The table below offers an easy way to compare the mid-term rental properties against short-term and long-term properties:

Now that you have a better understanding of these three categories of rental properties, let’s talk about why property managers should consider managing mid-term rentals.

Mid-term rentals present a ‘blue ocean strategy’ for property managers. They fill a unique market gap, catering to clients like traveling professionals, medical patients, and people in transitional life phases. This market is less saturated compared to short-term and long-term rentals, offering new avenues for growth in the property management business.

Moreover, mid-term rentals offer higher profitability potential compared to long-term rentals. Property managers can charge a premium for fully furnished and flexible living options while avoiding the high turnover and maintenance costs associated with short-term stays.

Here is a list of reasons why venturing into mid-term rentals (aka furnished rentals) is a good idea for residential property management companies:

Mid-term rentals offer a more profitable alternative to traditional long-term rentals by charging higher rates and reducing vacancies. But is it all smooth sailing? Like any business venture, there are several factors to consider before diving into mid-term rentals.

Effective property management strategies require an in-depth understanding of the local housing market, tenant demands, and supply trends. These factors play a crucial role in determining the feasibility and profitability of mid-term rentals in a particular location.

Property managers should conduct thorough market analysis to identify potential demand for longer term furnished rentals. To start off, you can ask yourself the following questions:

Moreover, understanding the rental rates and vacancy rates in the area is crucial for setting competitive prices and optimizing occupancy.

But knowing who your target market is is just once piece of the puzzle. Property managers should also consider what amenities and services their potential tenants would be looking for in a mid-term rental.

Property management strategies that work for traditional long-term rentals may not be as effective for mid-term rentals. It’s essential to note that mid-term renters have different demands and expectations compared to long-term renters. Therefore, property managers must adapt their management strategies accordingly.

During the interview, there was a detailed discussion about the amenities typically included or expected in mid-term furnished rentals. Here’s a breakdown of what was mentioned:

The overarching theme is creating a comfortable, convenient, and homely environment, catering to the specific needs of mid-term tenants, be they medical patients or traveling professionals. This approach differentiates mid-term rentals from the more transient nature of short-term rentals, which often cater to vacationers​.

In the podcast, we also delved into the topic of amenities in rental properties, discussing the common practice in short-term rentals of providing essential items such as toilet paper, paper towels, shampoo, conditioner, and basic kitchen supplies like salt, pepper, and cooking oil. This led to an exploration of whether mid-term rentals should offer a similar level of provisions.

While there’s a recognized overlap in amenities between short-term and mid-term rentals, underscoring the importance of ensuring basic comforts for tenants, the conversation revealed that there isn’t a clear consensus on the extent to which these supplies should be provided in mid-term rentals.

So if the minimum stay is a month long, is the property manager expected to provide a month-long supply of toiletries and kitchen essentials? According to Jessica, although there is no hard and fast rule about this, it’s good practice to give your residents enough to start off. Providing a couple days’ worth or a week’s worth of supplies can go a long way. You don’t want your residents complaining because there was no toilet paper when they used the bathroom upon arriving, do you? Talk about starting off on the wrong foot.

Remember that in the mid-term rental business, residents are expecting a higher level of service and a positive experience. Speaking of which, let’s talk about housekeeping services.

Unlike long-term leases, which may involve minimal interaction with residents, mid-term rentals require more hands-on management.

People who choose to rent mid-term rentals or furnished rentals will likely have similar expectations as guests at an extended-stay hotel. So unlike long-term tenants who may tolerate minor inconveniences, mid-term renters may not. They are looking for a hassle-free living experience during their temporary stay.

That’s why having a cleaning crew regularly maintain the property is a key aspect of managing these rentals. This regular maintenance not only helps in keeping the house in top condition but also plays a significant role in preserving the property’s assets.

Jason and Jessica highlighted that furnished rentals, particularly those that are well-maintained and offer premium finishes, tend to attract tenants who are willing to pay a premium.

These tenants generally have higher expectations regarding the upkeep and condition of the home. This includes not only the standard maintenance but also responding to specific work orders, such as sweeping out the garage or changing a light bulb (Jessica wasn’t kidding. This really happens).

This level of service and attention to detail justifies the extra expense of maintaining such properties and contributes to long-term savings by preserving the property’s value and appeal​.

Investing in furnishing properties might seem like a substantial upfront cost, but the returns justify the investment. You can get higher rental income than in a long-term lease while getting less frequent tenant turnovers than short-term leases. These two things could nicely balance out upfront costs.

Moreover, the “higher touch” level of service can reduce ‘normal wear and tear’ because of the following:

Mid-term rentals offer a unique blend of flexibility and stability, making them an increasingly attractive option in the property management landscape. They represent a significant opportunity for property management companies to innovate, diversify their portfolios, and enhance profitability.

As the property management industry evolves, adapting to new trends like mid-term rentals is crucial. They offer a fresh perspective on rental management, meeting the changing needs of tenants and providing a new avenue for property managers to grow their businesses.

In our next episode, we’ll delve deeper into the operational challenges and strategies for managing mid-term rentals. We’ll discuss finances and the subtle art of balancing tenant rights with property management objectives. Stay tuned for more expert insights that could transform your approach to property management.

If you haven’t subscribed to our newsletter yet, head on over to https://fourandhalf.com/subscribe/ to make sure you don’t miss when Part 2 of this interview goes out.

The post Maximizing Profits with Mid-Term Rentals: Property Management Blue Ocean Strategy – Part 1 appeared first on Fourandhalf Marketing Agency for Property Managers.